Suppliers’ Performance Evaluation and Ranking in a Supply Chain: An Analytical Hierarchy Process-Based Approach

Companies are now encouraging the outsourcing of their non-core activities, and are concentrating and allocating more resources on core activities that influence their dependence more on supplies. Therefore, it is necessary to develop a methodology for supplier selection and performance evaluation which depends on several criteria, including both quantitative and qualitative criteria. This paper presents how an Analytical Hierarchy Process (AHP)-based model is formulated and applied to a real case study for supplier performance evaluation and ranking. Four key criteria have been identified in the supplier performance evaluation process, using Pareto analysis. The suppliers are ranked based on the priority weights calculated for each supplier. The three top ranked suppliers are selected and the weak criteria associated with these suppliers are also identified.